Is Walthers ignoring N scale?

The latest version of the GP 18/20 in my opinion run as good as an Atlas and Kato. I have 2 of them and run them in tandems with both Atlas and Katos on a freight.

 

When a manufacturer or LHS bases its bussiness model on a high profit margin and the economoy collapses as it has...and they still expect to sell at that inflated margin to stay in bussiness...thats foolishness on their part. Tons of modelers left HO because it simply cost to much. They came to N Scale because the prices where more in line with their finances. Then the manufactures saw the exudus and decided to jack the price up on N Scale. In essence burning everyone in N scale. I witnessed prices doubling and even tripling in ONE Year !!! Like I have always said...when a bussiness fails because of their narrowmindedness...I wont/dont shed a tear. IF Walthers never produces another piece of N Scale anything...are we really any worse off ? There are more manufactures of N Scale stuff then ever. Let Walthers have HO...we are better off without em...as opposed to us whinning about their lack of caring for N Scalers.

Yes...there are manufactures who cater to those with $$$. I dont begrudge anyone that. There is some really fine scale stuff being made...for a price. But Walthers isnt one of those !! BTW...I read these boards everyday. I see more and more of those who just a few short years ago said "Price be damned...I want it!"....who are now counting pennies like the rest of us. IF the manufactures WONT change their attitudes and pricing to match the market...S***W em !!! :tb-ooh: JMO of course.

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I think part of the issue is that Walthers will make a nice model, and then they'll release it in just four or five roadnames but produce it in numbers as if they were releasing it in 30 roadnames. Eventually, all the Southern, Union Pacific, and Indiana Harbor Belt modelers are going to get what they want and that will be it, and when we KNOW that Walthers tends to steeply discount a year out a lot of us will just wait.

You don't see that kind of deep discounting ever from Kato or Atlas. While I love getting things at a discount I also would prefer not killing the golden goose over it, but if I know that Walthers is likely to hack the price by 40-50% or more in about a year I am willing to wait.

It's the same thing with BLI. I am interested in the MILW E-6 "Fast Fifteens" but I have seen what happens to their stuff 8-12 months later. It's half price.

I won't pretend to be an expert in model railroad manufacturing, but I think looking at some of these differences in manufacturer practices is instructive.

Adam

 

Even though I can afford to pay $20.00+ for a single freight car... that doesn't mean I wouldn't prefer to pay $10.00 or less for the same car. Heck... I remember paying $.99 for Atlas N scale freight cars in the 1980's. I'd buy them a dozen at a time so I could defray the cost of shipping over the bulk purchase too. At that time I was earning about $7.00/hr (min wage ~$3.00/hr) and my studio apartment rent was $200/mo... it was a dumpy apartment... ON MIAMI BEACH.

Things have changed quite a bit in the past 30 years... but it seems as though the cost of model railroading has increased at a higher rate than the cost of living in general. We won't talk about what I earn ... but minimum wage is only $7.75/hr... that same dumpy apartment goes for $800/mo. Those Atlas cars... now Trainman versions... with some improvements retail for about $10.00... discounted at about $7.00 from the SAME retailer I used to get them for $.99.

So... minimum wages have increased 2.5 times... apartment rent has quadrupled and the slightly improve N scale models have increased 7 fold. This is likely why there are so many price complaints. Granted... If I were still making minimum wage... I wouldn't even be able to afford to be on-line to discuss it on this forum.

So as far as the manufacturer/importers go... increases in material and labor costs have gone up over the past 30 years and therefore the cost of the models 'RIGHTFULLY' needed to increase. The one major factor that we are not taking into account is that their methodology of marketing the items has drastically changed... specially over the past 10 years.

Before we would get a new car and or locomotive whenever the manufacturer felt like they could justify the expense of tooling and projected to make THOUSANDS of copies... usually with the same 'few' popular roadnames... and in one roadnumber. There was no pre-order... just a whole bunch of stuff flooded into the market. Many complained back in the 1980's & 1990's that their was not enough choices... slow production of new models... etc etc etc. When the manufacturers began to ramp-up production of new items... they continued to make them in large quantities to justify creating the tooling. Unfortunately... that flood of items created backlogs of inventory at distributors and hobby stores. Money spent on stock that was over produced... as a result... we had those incredible discounts in the late 1990's and early 2000's. Until... the manufacturers realized they could not continue to 'give-away' the products... after all... they are in this business to profit... it is not charity work... and sadly we have lost some manufacturers due to their failure to make profits.

So now... we have limited production runs... which means the manufacturer will have to amortize the costs of the tooling over a longer period of time... increased cost of materials and increased labor costs (even in CHINA). Their philosophy of selling has also gone to applying a relatively high MSRP (manufacturers suggested retail price)... with the implied knowledge that the retailers will adjust that with discounting as it fits those retailers specific situation (overhead expenses). On-line (etailers) frequently can discount much more than the ordinary brick & mortar only stores... the internet has impacted how business is conducted... much to the demise of many brick & mortar shops which failed to adapt.

So I'm not shooting down the manfacturers for their practices... they are only trying to make a buck. Unfortunately... many of us... are no longer in a financial position to continue to pay the higher prices. I haven't reached retirement yet... even though my pay has been reduced by about 15% in the past 2 years... I can still afford the hobby because of other factors (my personal lower overhead). But I can foresee, in 15 years, where I will be making about 1/2 of what I currently earn... and may not be able to afford all the new items available in N scale. Sure... my home will be paid-off... I'll not have fuel/parking expenses to go to work... but other things will cost a lot more... including our beloved model trains.

So buy'em now... cause tomorrow they may be out of our financial reach.

 

Economic times like these really test a hobby. The hobby will survive and the companies that listen to consumer demands, in terms of quality and price will make it. Any company that is involved with model RR would be foolish not be on all message boards 24/7. While not everybody on these boards agree on everything, you can really dial in on the pulse of model RR. This is part of the reason why the hobby stores are struggling. (another topic I know) The model RR crowd is becoming very well informed. We know all of the discount shops, we know all of the releases and what is comming. To not listen to people on message boards or dicount them is to me a death sentance. Bottom line is N wouldn't be where it is today without people asking, or "compalining" for items.

 

Quote:
Originally Posted by cwwrman
The first run of GP 18s were around the $20 range. These were the version with the spring drive. The second run came with the 5 pole motor, flywheel, and split fram design, similar to what the GP 20 had. Now that same second range GP 18/20 is going for $70-80 range, which in my opinion is competitive. It sure beats the latest run of Atlas GP 9's that are well over $100! YIKES!

Yes they do. I got FA/B2's with the older spring drive and plastic frame and they re smooth as silk and will outpull my Kato F7's. Same goes for the LifeLike FA/B1's with the split frame. Hitched them up to 143 cars and they just walked away with it all. Could have pulled more but we ran out of layout.

 

Why is the Walthers statement pure ignorance?? Ignorance is not understanding that a business needs to make a profit to stay solvent. If you blow out most of your inventory at cost, you are not making a profit. Profit is not only cost to manufacture a model, but cost to maintain an inventory, pay sales people, customer service, advertsing etc. etc. Selling little toy trains, making $10-15 profit per loco is not a crime. Nobody is making money hand over fist here. When you are talking production runs in the 3-500 piece range, making $10 a pop on a structure nets you barely enough money to make running it even justifiable. If you have to deep discount it to sell it, then you might as well be paying your customers to take it off your hands.

Most Walthers structures are not made in China but Denmark. Production costs are a lot higher in Europe thus the kits are going to cost more and less profit is made. BTW - most of you haven't noticed that the pricing on Life Like buildings was just about chopped in half about a year ago. Most of the Life Like N scale buildings are back down to the $10-15 range retail instead of $20-30. Because of this our shop is selling them like hotcakes. Walthers is learning that smaller profit spread across more product moved can work. They are even doing limited production on structures. They brought back a few structures last year as a limited re-run. They are most all gone and there is no plan of re-running them. They never went to discount pricing.

Life Like is one one that originally created the situation by over producing everything they made, over saturating the market and then having to blow out the remains to clear space for the next loco. As exemplified by this post, customers caught on quickly, waited till the loco's sat on the shelf a while and the deep discounts started happening. Life Like didn't learn as quickly as it's customers though and kept up the policy until they finally went under. Walthers bailed them out but also had somewhat of a similar policy so it was continued. You have been conditioned for the blow out pricing from these companies. Atlas, Kato and others never entered into this pattern so nobody expects it from them. They would rather set on product than blow it out and devalue the line.

I believe Walthers has learned from their past errors. The current announcements have been made under their new scheme of limited production. Remember the updated Y-3's, two production runs, neither lasted in stock more than a couple weeks. These were the first loco that was "built to order" for them and was thier wake up call so to say. Since those loco's, none of their releases have been in huge numbers, to the point of needing to be blown out. Some of the recent releases (Certain road names/numbers of the RS-2) were sold out at Walthers before they even arrived in stock. I suspect this will be their mode of operation for a while until people realize the days of deep discount blowouts are not going to return. It should be noted that the recent loco announcements all came in at a $99 retail price point. This is including retooling and revisions for DCC in all the releases. Atlas keeps pumping out the same old loco's at $119-139 with no tooling updates, no changes, just new road names and numbers.


BTW - I've been in and out of N scale since I was in High School. Since when was N scale ever substancially cheaper than HO? I've never seen a point in time when N scale was different enough in pricing from HO to make anybody choose one over the other just due to pricing.

 

So pricing a product higher than what the market will accept is not ignorance of the market? Everybody understands that a business has to make a profit. But it is up to the business to figure out how to do that in a given market and to do that one needs to know the market. Not knowing the market is ignorance pure and simple.

What you are telling me is that Walthers is not cost efficient and that is why their prices are too high.

Whatever LifeLike did or did not do, the point is that Walthers bought them and they bought the whole enchilada and they, as you admit continued the practice. So who do they have to blame, their customers or themselves?

Well maybe that explains why they took the old LifeLike North East caboose that sold for $9.95 retail made no improvements other than to repackaged it and offered it for sale for $24.95. They did not even put in window glazing.

 

Nope, just explains why if they can't sell the product and make a profit, why they would not want to continue in the market. Everybody here seems to think that it cost's just pennies on the dollar to make this stuff and Walthers is raping us for charging what they charge. When they blow product out at 50% off they are not making any money, remember, they still discount that item to the hobbyshops that sell it so the shop can still make a little money at the discounted pricing. In round hypothetical numbers, a $10 building, blown out at 50% off, is being sold to the shop at 25% of retail. That means Walthers sold the building for $2.50. Even if they only have $2 in production of the kit, making 50 cents per item across a couple hundred items is not worth being in business over.

I'm still not sure what at walthers is so terribly overpriced (NE caboose not withstanding). It's no longer the 70's, prices have increased. Structure pricing runs pretty much the same as HO offerings. The cost in a building is not materials, but the design and tooling which is pretty much the same cost for both HO and N.

Their molds are held by Vollmer. I doubt they have an option to move production elsewhere without retooling all new molds unless vollmer moves production to China.

As I also stated is that the old ways are now gone. You won't see that practice any more and it will take quite a while for customers memories to fade. It will be a rough struggle for them until that happens. Customers only seem to remember the cheap pricing, not the circumstances behind it. In the mean time, people waiting around for the blow outs on the new releases will hopefully be left behind when the product sells out before discounts happen. That is the only way consumers will adapt, when they loose out on what they wanted a couple of times.

If you guys think you can do a better job, then put your money where your mouth is and start a model railroad business or distributorship that handles close to a million SKU's. Then and only then can you have valid understanding of the problems involved. Spending a few extra dollars on a train car or building is sure a lot cheaper than loosing hundreds or thousands or more on a production run of a new product that goes south because some yahoo on a forum deemed the item too expensive or not worthy.

If you are not ready to put your own butt on the line, quitchyabichn'.

 

I still don't see how saying that if people don't start buying the product, we are going to stop producing it is an ignorant statement?

It's basic business. Why continue to support a loosing product, be it because of a lack of understanding of the market, or consumer apathy? Money lost can not be used to produce more product. I happen to live in the home town of P&G (Procter & Gamble) and get to talk to many of their executives. They have started adopting a policy that if a brand line doesn't gross a billion a year, it get's sold off or chopped. Pringles just got sold off because it dropped below the magic number. If model railroading companies took the same approach, at a much smaller magic number, we would be whittled back to the early days of N scale where you could model any railroad you wanted, as long as it was Santa Fe.

There is nothing wrong with trying to save money. The problem is, waiting for the fire sales became the norm in N scale. Customers expected Walthers to drop the price in 5-6 months so very few sold at normal price. We wouldn't order them at the shop for the same reason. I knew in 6 months they would be selling cheaper than our original cost in the first place. It wasn't that the product wasn't worth the asking price, people knew that they would get blown out later so why buy them now. Walthers finally realized that and has changed thier production to keep it from happening again. Because of that, our shop ordered some of the GP60's, RS-2's, and SW's. I'm not so afraid of getting stuck with them.

 

Correct, neither I nor, I suspect others here, think that the reason they exist is to keep Walthers in business. Threatening potential customers with stuff like, "if you don't buy what we make (at our price) then we won't make anymore" is a failed policy to begin with. It reminds me of the kid who doesn't get his way so he threatens to take his football and go home. Like we couldn't get another football? In addition their pricing is ridiculous and one need only look at the NE caboose. They want $24.95 for it while a far better detailed Atlas NE 6 caboose sells for $22.95. To say that the Walther's caboose is crude in comparison is being kind to Walthers.

 

If they "take their ball and go home", 50% or more of the structures on our layouts would not be available. Nobody else is going to take up the slack, look at the DPM, Model Power, even Bachmann, nothing new in how many years. What other company is going to spend the money on tooling for a new line of injection molded structures.

So many selfish, complaining people in the world any more. If Walthers doesn't produce something you are interested in, then you have no need to worry and no reason to complain. If they make something you really want, and you feel it is a fair price, buy it. Just because something may be out of your price range and or need, doesn't mean there aren't 10 more people right behind you that feel it is a good value and are ready to step up to the plate to purchase it. It doesn't give you the right to bash a product because you either won't or can't afford it.

All this complaining does nothing for the hobby except make you sound like a bunch of whiny so&so's.

 

EXCUuuuuusssseeeee Me ?? !! :tb-wacky:

I am a CONSUMER...I have EVERY right to complain about anything I want.

Get used to it !!! :tb-mad:

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Amen.

I'd just like to point out that Walthers happens to be the ONLY manufacturer that has invested in top-quality turntable for the N scale market. Is it expensive? Yes, but I've bought two of them (one for my home layout, one for my club module). If they didn't make this turntable . . . . well, I don't want to contemplate that.

And Walthers is the source of every building in my Steel Mill scene on my layout, including the Blast Furnace, which is a model that I still can't believe was possible to produce given the overall complexity.

So I echo Tony - if you don't like it, don't want it, think it is too expensive, whatever, then just don't buy it. It's my same answer to people who complain about sex and violence on TV: turn the damn thing off if you don't like it. Don't impose your views on me, since I find I'm perfectly capable of making my own decisions about what to buy and what to watch.

John C.